Cattle futures came under pressure late last week and early this week but have found their selves consolidating in the last two days. Is the market catching its breath before making another leg lower or is there more relief to come?
Watch us on RFD-TV, today at 12:45pm CT!
Live Cattle
Technicals (October – V) October live cattle futures continued to trade in a choppy manner but did tack on some gains at the close. Fear in the outside markets has subsided some which has calmed the nerves some. First resistance for today’s trade comes in from 180.575-181.175. If the Bulls can chew through that pocket a retest of the 50% retracement (the midpoint of the recent high to low) could be in order, that comes in at 182.675. We continue to be in the camp that relief rallies are likely to be viewed as selling opportunities, particularly in the back months and for those who need to protect/hedge the physical. On the support side of things,
- Resistance: 180.575-181.175, 182.675-183.275*
- Pivot: 179.35-180.50
- Support: 176.35-176.22***
Weekly Export Sales
Beef: Net sales of 10,000 MT for 2024 were down 43 percent from the previous week and 27 percent from the prior 4-week average.
Daily Livestock Summary
Yesterday’s cutout values were softer with choice cuts down 1.96 to 313.85 and select cuts down .79 to 298.83. The 5-area average price for live steers was reported at 192.67. Daily slaughter came in at 122k head, in line with last week and last year. Week to date slaughter stands at 363k head.
Below: Daily chart of October live cattle which illustrates the accelerated selling pressure following the breakdown of trendline support. Also included is a set of Fibonacci retracements from the high to low of the recent move.
Feeder Cattle
Technicals (August – Q) August feeder cattle futures posted their second consecutive inside day (trading within the previous day’s range). Despite the consolidation in the last two sessions, the RSI remains in oversold territory with a reading of 26.12, the lowest since last November, which was right before the last dip lower before posting a low on December 7th. The lowest RSI during that time frame was 24.68. Is the RSI a good enough reason to be Bullish from these levels, short answer is no. With that said, we continue to believe we could see some relief from these levels that may setup for another opportunity to the sell side for those with a bearish bias or for those that need to hedge. The CME CVOL index, a measure of volatility, is at its highest levels since the Spring, it would be nice to see that subside which could help options become a little less expensive. The chart below includes a set of Fibonacci retracements from this year’s range. Not illustrated is a Fib retracement from the recent selloff, the halfway back point on that would come in near 249.15.
- Resistance: 245.925-246.675, 249.15-250.92*
- Pivot: 244.275
- Support:240.775-240.925, 237.80-237.97* 229.50*
Below: Daily chart of August feeder cattle that illustrates the accelerated selling pressure that took place following a break below trendline support. Also included is a set of Fibonacci retracements from this year’s trading range.
Want to keep reading?
Subscribe to our daily Livestock Roundup for daily insights into Feeder Cattle, Live Cattle, and Lean Hogs technicals, including our proprietary trading levels, and actionable market bias.
Sign Up for Free Futures Market Research – Blue Line Futures